Macau: My new infatuation
Investment strategies come a dime-a-dozen; with many worth less than a dime. I'm what you would call a simple-minded, intuitive investor. I invest in what I love, the companies that are a constant in my life each and every day -- Apple, Google and Starbucks. Following this admitedly pollyanna-ish logic, Macau is my latest new love (but my simple logic also dictates that when everyone is talking about buying flats for investments in Macau or buying small, ground floor shops for investment to lease to Circle Ks and 7-11s, everything must also be overvalued. So the trick is in finding the overlooked gems.).
Prior to this October, I had not been to Macau (despite its close proximity to Hong Kong -- an hour by TurboJet, 15 minutes by HeliExpress) in at least 5, maybe even 7 years; even the opening of Sands could not get me there. But since the opening of Wynn Macau, I have already been there twice this month. Had it not been for a conflicting engagment, I might have been at Wynn again this weekend with another group of friends. I guess this also proves the point that competition is the surest way of spurring economic development. When Stanley Ho had a monopoly on gaming, casinos in Macau were some of the most undesirable places to visit. Currently, Sands, based on rather unscientific research (i.e. cocktail and dinner table conversations) is probably more popular with serious gamblers (many Chinese customers even find Sands to be aesthetically more impressive; don't ask me why). Wynn Macau, however, has gotten me, previously a non-gambler, interested in spending my leisure time in their little fantasy world. Apparently, they pump fresh oxygen into the gambling halls, which is why I managed to stay up until 4:30am making HK$100 bets at their blackjack tables and still feeling giddy and fresh. Maybe offices should consider using similar systems and perhaps it will yield higher productivity from their employees. Apparently, in the first 13 days of its opening, Wynn Macau took in US$900 million in chip sales, but I wonder how much of that they manage to keep as gaming revenue (actually, I'm really interested in finding out how this whole gaming business works). Afterall, both times I've been there, I have walked out with more money. But then again, I always end up spending more money than my winnings in their spa or F&B outlets. Thus far, I've not made any purchases in their shops.
But retail in Macau is apparently very hot; I'd love to see the sales numbers for luxury retail stores (I was told that Louis Vuitton Macau store sales have topped Las Vegas store sales, but one never know if it's just hype or reality). Over dinner with a trio of shopping mall REIT guys in Wynn's Il Teatro, a pretty competant Italian restaurant with a reasonably-priced wine list, I got an interesting picture of Macau visitor spending habits: the big spenders are guys and spend are mainly spending on themselves. In Wynn, watches and men's apparel from Giorgio Armani is doing very well. Bags and accessories also do well. Jewellery, on the other hand, does not. Hermes is probably kicking themselves for missing the boat on a store in Wynn's first phase (apparently, the space went to Giorgio Armani). I wonder if luxury cars would do well. A high-roller might win enough to buy himself a Ferarri. For myself, I would definitely spend more on destination dining, shopping or entertainment.
By destination shopping, I mean brands or shopping experiences that are hard to come by in Hong Kong or even other major shopping cities. Actually, after my post on Edun, over a Starbucks coffee break with BL, I suggested that someone should create a goodwill shopping mall. It would be a destination bringing together all the brands that allow shoppers to do good while consuming and highlight companies that practice fair trade practices. So you'd have Edun, People Tree, GAP highlighting their (RED) clothes, G.O.D. highlighting their condom line of bed linens for AIDS Concern, Ralph Lauren's Pink Pony products benefitting breast cancer care and prevention, Marc Jacobs' Al Gore Fashion Line benfitting The Climate Project, etc.
These are exciting times in Macau. Galaxy's Star World just opened last week right next to Wynn Macau; it was packed. Sands' Venetian is expected to open summer 2007 in Macau's approximately 250-acre Cotai Strip and MGM Grand in late 2007/early 2008.
Prior to this October, I had not been to Macau (despite its close proximity to Hong Kong -- an hour by TurboJet, 15 minutes by HeliExpress) in at least 5, maybe even 7 years; even the opening of Sands could not get me there. But since the opening of Wynn Macau, I have already been there twice this month. Had it not been for a conflicting engagment, I might have been at Wynn again this weekend with another group of friends. I guess this also proves the point that competition is the surest way of spurring economic development. When Stanley Ho had a monopoly on gaming, casinos in Macau were some of the most undesirable places to visit. Currently, Sands, based on rather unscientific research (i.e. cocktail and dinner table conversations) is probably more popular with serious gamblers (many Chinese customers even find Sands to be aesthetically more impressive; don't ask me why). Wynn Macau, however, has gotten me, previously a non-gambler, interested in spending my leisure time in their little fantasy world. Apparently, they pump fresh oxygen into the gambling halls, which is why I managed to stay up until 4:30am making HK$100 bets at their blackjack tables and still feeling giddy and fresh. Maybe offices should consider using similar systems and perhaps it will yield higher productivity from their employees. Apparently, in the first 13 days of its opening, Wynn Macau took in US$900 million in chip sales, but I wonder how much of that they manage to keep as gaming revenue (actually, I'm really interested in finding out how this whole gaming business works). Afterall, both times I've been there, I have walked out with more money. But then again, I always end up spending more money than my winnings in their spa or F&B outlets. Thus far, I've not made any purchases in their shops.
But retail in Macau is apparently very hot; I'd love to see the sales numbers for luxury retail stores (I was told that Louis Vuitton Macau store sales have topped Las Vegas store sales, but one never know if it's just hype or reality). Over dinner with a trio of shopping mall REIT guys in Wynn's Il Teatro, a pretty competant Italian restaurant with a reasonably-priced wine list, I got an interesting picture of Macau visitor spending habits: the big spenders are guys and spend are mainly spending on themselves. In Wynn, watches and men's apparel from Giorgio Armani is doing very well. Bags and accessories also do well. Jewellery, on the other hand, does not. Hermes is probably kicking themselves for missing the boat on a store in Wynn's first phase (apparently, the space went to Giorgio Armani). I wonder if luxury cars would do well. A high-roller might win enough to buy himself a Ferarri. For myself, I would definitely spend more on destination dining, shopping or entertainment.
By destination shopping, I mean brands or shopping experiences that are hard to come by in Hong Kong or even other major shopping cities. Actually, after my post on Edun, over a Starbucks coffee break with BL, I suggested that someone should create a goodwill shopping mall. It would be a destination bringing together all the brands that allow shoppers to do good while consuming and highlight companies that practice fair trade practices. So you'd have Edun, People Tree, GAP highlighting their (RED) clothes, G.O.D. highlighting their condom line of bed linens for AIDS Concern, Ralph Lauren's Pink Pony products benefitting breast cancer care and prevention, Marc Jacobs' Al Gore Fashion Line benfitting The Climate Project, etc.
These are exciting times in Macau. Galaxy's Star World just opened last week right next to Wynn Macau; it was packed. Sands' Venetian is expected to open summer 2007 in Macau's approximately 250-acre Cotai Strip and MGM Grand in late 2007/early 2008.
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